Deutsche Bank will next week slash bonuses for its City-based investment bankers and others by about 60% after running up pre-tax losses approaching €6bn (£5.2bn) in 2008.

Germany's biggest bank indicated that it is to scale back bonuses further this year, steeply reducing immediate payouts and deferring rewards for up to four years. It also considered clawing back "unearned" bonuses, like UBS and Credit Suisse in Switzerland, though sources indicate it is unlikely to follow suit.

The Swiss banks are due to announce bonus cuts of up to 80% when they report 2008 figures next week, with UBS likely to declare billions in further losses and writedowns. Danish rival Danske Bank yesterday scrapped bonuses for its board and severely cut those for staff.

Underlining the scale of its financial meltdown in the final quarter of 2008, when it recorded negative revenues of €885m, Deutsche reported a full year pre-tax loss of €5.7bn - the first since the bank in its current form was established in 1957. Hit by the collapse in debt and equity trading - the main source of revenues at its once-stellar investment bank in the City - it cut its dividend to €0.50 from €4.50 last year and warned of bleak prospects for the global economy.

As a unit, Deutsche's investment bank, which has paid out huge bonuses in the past, lost €5.8bn pre-tax in the final quarter alone and €8.5bn in 2008 as a whole. It lost €3.4bn in credit trading and €1.7bn in equity derivatives trading and saw net negative revenues of €3.8bn. It is already shedding 1,200 jobs, but Josef Ackermann, the bank's chief executive, indicated there would be no further cuts unless the downturn deteriorated further.

Deutsche reported that it had cut pay and benefits by 36% in the final quarter. Its board has already waived bonuses for last year - the first among the big banks to do so - with Ackermann, who earns about €15m a year, distributing his among staff.

Hermann-Josef Lamberti, Deutsche's chief operating officer, said payouts in coming years would be "limited", with the bulk of bonuses earned over a period of three to four years. Deutsche is moving towards adopting the drastically changed compensation models of the big Swiss banks: Lamberti said a large part of future bonuses could also be paid in shares.

Confirming he is to step down at next year's annual meeting, Ackermann admitted to being "very disappointed" at the results and refused to give any guidance for 2009, despite insisting the bank had performed well in January.

Pre-tax losses in the last three months of 2008 were €6.2bn. But Deutsche's "tier one" capital ratio - a key measure of financial strength - jumped to 10.1%.

The bank said its business had shrunk dramatically in the unprecedented trading conditions following the collapse of US bank Lehman Brothers: full-year net revenues collapsed to €13.5bn compared with €30.7bn in 2007. Writedowns of assets totalled €7bn compared with €2.3bn a year earlier.

Deutsche has stood aloof from Germany's federal banking bail-out and Ackermann reaffirmed it had no need to access recapitalisation or loan guarantee funds. "It's important to know we are determining our own fate," he told a press conference. Shares, which fell almost 10% in early trading, later recovered but were nearly 5% off at the close at €20.33.